The optimized design conditions of pebble bed regenerative heat exchangers are discussed for minimizing their pressure loss with minimum deterioration of their thermal performance. Blow-down experiments for heating argon by hot air or combustion gas are carried out to measure the pressure loss of argon in a pebble bed. Appropriate correlations for predicting the pressure loss are selected based on the measured results of the pressure loss. The optimum values of the pebble diameter and the mass flow of a working gas are determined by calculating the pressure loss and the thermal performance of a pebble bed regenerative heat exchanger under cyclic continuous operation. The use of helium as a working gas of closed cycle MHD instead of argon is advantageous from the view point of both the pressure loss and the thermal performance.